1. Choose an appropriate candidate. Wash it beforehand, or be prepared to wash the unraveled yarn like this afterward.
Bad seams are machine sewn with thread and serged, and it looks like the edges of the knitting have been cut. A sweater like this would unravel into a myriad of short pieces as long a the sweater is wide. Pretty much useless for unraveling. Although, if you come across a wool sweater like this, you can felt it in the washing machine and then cut the fabric up for other things.
3. Pull out seams. It may take a while to get started, but once you find the end of the seam, pulling on the thread should unravel the whole thing rather quickly. Sometimes I’ll snip the first inch or two before getting a good grasp on the thread. This sweater in particular came apart really easily. I started unraveling at the sleeve cuffs, then removed the arms, then the collar, and finally the shoulder seams. The shoulder seams are often the most frustrating and sometimes I’ll just cut them instead. It’s good to remember that even if you do lose yarn to cutting at the wrong place, you haven’t lost much. You’ll still have more yarn at the end than you could have gotten new at a craft store.
4. Unravel the pieces. It takes some work to figure out where the pieces start, but it’s different with every sweater. Again, a shortcut is to just cut off the first couple rows where there may be some complex binding off and get straight to the plain knitting. It’s pretty easy going from here if the sweater hasn’t started felting or have particularly thin yarn.
Note: I’ve heard that keeping wool in balls isn’t good for long term storage. I’ve never taken the trouble of making my balls of wool into hanks, but it might be a good idea if you’ve unraveled something that’s a particularly nice yarn.